Assignment on Legal Issues and Risk Management Plan

Introduction of Legal Issues and Risk Management Plan

            It is important for any business to have a risk assessment and management plan to avoid any kind of legal issues associated with its business. There are various kinds of risks, which may be posing a potential threat for the business organization, and if those risks are not assessed and managed within time, then the business may have to face a variety of legal issues and penalties, and in some cases, the loss may not be repairable. So, the process is to identify risks in the first instance, and then conducting a detailed assessment to develop a viable strategy so that risk can be managed. This whole process will be considered a risk management plan, which can also help Jumpers Inc. to avoid any legal issues and legal liabilities. The business is very simple in its process because there are two to three main elements associated with their sky diving business. The first element is having an aircraft, the second element is to have parachutes for diving, and the third main element is the trainers, who are involved in the process of sky diving. So, there are no complexities involved in the overall business process. But the issue is that airstrip of the company is sitting on a former gas station, and any incident can happen due to this gas station, which can be a physical, human, and safety risk, as well as, a legal risk. So, in this essay, the effort will be to discuss possible risks and issues, and what should be the way out in this regard (Aven, 2016)

Discussion of Legal Issues and Risk Management Plan

            First of all, it is important to understand what kind of risks a business can face in its business conduct. The first risk in this regard is the physical risk, where the people involved in the work processes such as employees, and assets or the building of the company can face a physical threat. In this case, the physical risk is there because airstrip is on the gas station, which can come up with an accident damaging the aircraft, property, as well as, posing a risk to the safety of workers involved. The hanger of the aircraft is also at the same place, which is also at risk if any unforeseen situation happens. To avoid this risk, first of all, it is vital to have all kinds of safety equipment to make sure that they can respond to any incident if it happens until the rescue help comes to the site. But the best solution to get out of any risk or danger is to look for any other location with the airstrip and hanger for the aircraft. This strategy will help them to avoid a variety of potential risks, which they are facing due to having their business location at a former gas station. There is no chance of situation to get better because they can’t do anything about the gas station, which is leaching gas (Webb, 2019)

            Strategic risk is one of the important risks for a company, but in this case, the company is not having any strategic risk, because there are no competitors in the area to deal with. If there would have been any competitors nearby, then things would have led to strategic risk, so its good news for the company. In this case, the given details are not showing any indication of human risk, where employees or workers are posing any threat. The company has a total of three trainers, and there is nothing mentioned on their part. Seemingly, the technology is not an issue, because they are having advanced aircraft with parachutes, and experienced trainers. So, it’s again good for the company to avoid such kind of risks, which can also be damaging in so many ways. The most important issue for the company is financial and legal issues, which they can face in this situation. They have leased this airstrip and hanger, and if any incident happens, then the lease company will not pay for anything because Jumpers Inc. already knew that airstrip is on the gas station, and they agreed to do their business at this location. But if any accident happens, where aircraft and people working with the aircraft face any physical threat due to gas leakage, and in the worst-case scenario, a gas blast can happen to destroy the site and aircraft. Then all three shareholders and owners of the business will have to pay all of the liabilities, like if they have taken any debt, or if any trainer loses his life, etc. (Yip, 2017)

            It means that they will not only face a financial setback, but they may also get in trouble due to legal issues. A small company does not have a strong ability and capability to deal with the legal and financial risks, because they don’t have enough assets and revenue to support their business in the time of trouble. There is a framework to deal with any kind of risk, and Jumpers Inc. should look at this framework to remain on the safe side. The first step in this regard is to follow a risk management framework such as ISO 31000. Once the framework is set, things will get easier for them to manage. This framework has so many elements to identify potential risks, and then manage them accordingly. But nothing can be enough in the absence of organizational commitment. The company will have to show its commitment and passion to deal with risks in an appropriate manner. Then here comes the important step of identifying the legal risks, where the first thing is to find sources, which can come up with the legal risks. Then analyze potential risks coming from these sources. After recognizing the risk, the next step is to note down all the potential risks so that each risk is evaluated one by one. The other important thing to note down this risk is its communication to the relevant parties. “They authorize her to engage counsel to represent the corporation at $350 per hour and conduct a legal audit of it. She reaches out to you to advise her and conduct the audit at the rate of $400 per hour. She agrees on behalf of the corporation to hire you at that rate”.

Yes the above explained is the issue ; because the  issue has been explained which can actually lead to other potential legal issues, safety issues, and liabilities, so they need a proper risk management plan to remain safe from any legal and other potential damages. It was a great idea given by Ike and Tina to giving full hand to Gertrude for managing this risk assessment process, as two of them will focus on the business, and one owner will deal with the legal matters (Little, 2018). For instance, any potential risk faced by the company should be communicated with the people involved in the business, and in this case, the trainers and divers should be provided a list of potential risks to get their agreement to work in those risky conditions.

Conclusion of Legal Issues and Risk Management Plan

            After analyzing the case and given scenario, it can be said that Jumpers Inc. made a wrong decision in the first instance to lease an airstrip and hanger for the aircraft at a location, where a former gas station was located. The leakage of gas is an indication that things are not going fine, and they are on the verge of a disaster or accident, which can happen at any time. Keeping this thing in context, it was a wise decision by them to pursue any potential risks in advance to avoid any legal and financial issues. However, it is recommended to the company that they should look for any other airstrip, which is safe enough to use. The process is to identify risks in the first instance, and then conducting a detailed assessment to develop a viable strategy so that risk can be managed. But the issue is that airstrip of the company is sitting on a former gas station, and any incident can happen due to this gas station, which can be a physical, human, and safety risk, as well as, a legal risk. The hanger of the aircraft is also at the same place, which is also at risk if any unforeseen situation happens. There is no chance of situation to get better because they can’t do anything about the gas station, which is leaching gas

References of Legal Issues and Risk Management Plan

Aven, T. (2016). Risk assessment and risk management: Review of recent advances on their foundation. European Journal of Operational Research, 253(1).

Little, M. (2018). 6 Steps to Legal Risk Management. Retrieved April 14, 2020, from https://www.berkmansolutions.com/risk/6-steps-to-legal-risk-management

Webb, R. (2019). 8 Ways to Identify Risks in Your Organization. Retrieved April 14, 2020, from https://www.clearrisk.com/risk-management-blog/6-ways-to-identify-risk

Yip, C. (2017). 6 types of business risks you need to know. Retrieved April 14, 2020, from https://www.experian.co.uk/blogs/latest-thinking/small-business/6-types-of-business-risks-you-need-to-know/